, Japan
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How inclusive are life and health insurance markets in Asia?

Japan has the most inclusive L&H market in Asia.

The Land of the Rising Sun has risen in the ranks of most inclusive markets for life and health (L&H) insurance, ranking first in Asia and second globally.

According to a study by the Swiss Re Institute (SRI), Japan has an aggregate inclusion score of 0.66, falling behind the United States by a few points. 

SRI’s “The Life & Health Insurance Inclusion Radar” measures the inclusivity of L&H markets based on three dimensions: availability, accessibility, and affordability.

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The report said Japan is effective in making L&H insurance highly accessible to a broad spectrum of customers, evidenced by novel approaches to distribution and a high life insurance penetration rate. 

Japan, however, is somewhat weaker in providing skills development opportunities for insurance professionals, and innovation on the underwriting spectrum, creating a deficit in the availability dimension. 

Consumers in advanced markets like Japan experience fewer difficulties accessing their L&H insurance services than those in emerging ones. 

“This is primarily driven by systemic factors like their financial markets being more established, leading to high levels of financial institution account-holding and credit usage,” SRI stated.

L&H insurance markets in advanced countries also provide a “wide range of cover types and innovative product options” that suit their consumer’s needs more than those in emerging markets, added SRI.

Other Asian countries which made the top 10 were India at 6th (0.52), and Indonesia at 8th (0.51).

The report, however, underscored that no L&H insurance market is “fully inclusive.”

To make L&H insurance markets in both advanced and emerging countries inclusive, SRI said they must perform consumer-focused market research across all segments to understand the needs of underserved customers and strategic partnerships to increase accessibility for consumers to insurance products.

They must also focus on innovating their product development to provide consumer needs affordably and efficiently and create a dialogue with regulators to ensure consumer protection and the environment in which innovation can flourish.

“By making L&H insurance more affordable, available, and accessible, individuals and households are better equipped to withstand the financial challenges that occur when a primary breadwinner passes away or when they incur high costs of healthcare treatments,” Julien Descombes, Head of Swiss Re’s Life and Health Products Reinsurance, said.

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